Fact based stock research
Emerson Electric (NYSE:EMR)

US2910111044

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Emerson Electric stock research in summary

emerson.com

ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Emerson Electric (Electr. Components & Equipment, USA) shares have much better financial characteristics than comparable stocks. Shares of Emerson Electric are a good value (attractively priced) with a consolidated Value Rank of 97 (better than 97% of alternatives), show above-average growth (Growth Rank of 75) but are riskily financed (Safety Rank of 40), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on Emerson Electric's financial characteristics. As the company Emerson Electric's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 97) and above-average growth (Obermatt Growth Rank of 75), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 40) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	97
Growth Rank	75
Safety Rank	40
Combined Rank	88

Country	USA
Industry	Electr. Components & Equipment
Index	Dividends USA, Water Tech, S&P 500
Size class	XX-Large

This stock has achievements: Top 10 Stock.

18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Emerson Electric

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	97	100	97
GROWTH
GROWTH	38	49	61	75
SAFETY
SAFETY	23	96	79	40
SENTIMENT
SENTIMENT	n/a	71	99	^new
360° VIEW
360° VIEW	n/a	100	100	^new

Most recent update of the stock research: 18-Apr-2024. Financial reporting date used for calculating ranks: 30-Nov-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Emerson Electric is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	97	100	97
GROWTH
GROWTH	38	49	61	75
SAFETY
SAFETY	23	96	79	40
COMBINED
COMBINED	30	100	96	88

Last update of combined financial performance: 18-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Emerson Electric the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2024, Emerson Electric shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Emerson Electric. Price-to-Profit (also referred to as price-earnings, P/E) is 76 which means that the stock price compared with what market professionals expect for future profits is lower than for 76% of comparable companies, indicating a good value concerning Emerson Electric's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 46, which means that the stock price is lower as regards to invested capital than for 46% of comparable investments. On the other hand, Price-to-Sales is less favorable than 56% of alternatives (only 44% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 0% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 97, is a buy recommendation based on Emerson Electric's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	50	68	51	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	57	75	87	76
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	23	41	67	46
DIVIDEND YIELD
DIVIDEND YIELD	73	99	100	100
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	57	97	100	97

Last update of Value Rank: 18-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Emerson Electric; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2024, Emerson Electric shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Emerson Electric. Profit Growth has a rank of 83, which means that currently professionals expect the company to grow its profits more than 83% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has a below the median rank of 20, which means that, currently, professionals expect the company to grow less than 80% of its competitors, and Capital Growth also has a lower rank of 47. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Emerson Electric. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	38	15	42	20
PROFIT GROWTH
PROFIT GROWTH	62	40	74	83
CAPITAL GROWTH
CAPITAL GROWTH	n/a	69	67	47
STOCK RETURNS
STOCK RETURNS	65	73	51	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	38	49	61	75

Last update of Growth Rank: 18-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Emerson Electric.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 40 (better than 40% compared with alternatives), the company Emerson Electric has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Emerson Electric is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Emerson Electric. Leverage is at a rank of 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors. Liquidity is also good at a rank of 68, meaning the company generates more profit to service its debt than 68% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 7, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 93% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 40 (worse than 60% compared with alternatives), Emerson Electric has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Emerson Electric. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Emerson Electric and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	35	28	60	56
REFINANCING
REFINANCING	18	100	57	7
LIQUIDITY
LIQUIDITY	56	88	57	68
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	23	96	79	40

Last update of Safety Rank: 18-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Emerson Electric and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	32	83	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	61	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	95	100	^new
MARKET PULSE
MARKET PULSE	n/a	38	64	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	71	99	^new

Last update of Sentiment Rank: 18-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Emerson Electric.
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